**Reddit Reports Strong Quarterly Sales and First Profit Since IPO**

Reddit on Tuesday reported a substantial rise in quarterly sales, reaching $348 million, a significant 68% increase from last year's numbers and surpassing Wall Street's forecast of $313 million. The company's revenue guidance for the fourth quarter also exceeded expectations, demonstrating strong financial health.

Despite recording an adjusted earnings per share (EPS) of $0.16, which fell short of analysts' predictions of $0.20, Reddit announced its first profit of $30 million since its initial public offering (IPO). This is a remarkable turnaround considering the net losses of $10 million reported in the previous quarter and $7.4 million in the same period last year. Notably, Reddit had previously achieved profitability during the fourth quarters of 2021 and 2023 before going public.

User engagement on the platform has reached unprecedented levels, with daily active users soaring nearly 50% to over 97 million. This increase in user traffic has likely contributed to the company's robust financial performance.

One of Reddit’s major investors, OpenAI's Sam Altman, has seen his stake in the company grow significantly, now valued at around $1.4 billion. Altman owns approximately 12.2 million shares, according to a February 21 filing with the Securities and Exchange Commission. Reddit began trading in March and has since become one of 2024's most successful IPOs.

The company's financial success has been driven primarily by a boost in ad sales, with third quarter ad revenue rising 56% from the previous year. Additionally, lucrative AI licensing agreements with giants like Google and OpenAI have bolstered Reddit's earnings. CEO Steve Huffman mentioned during an investor call on Wednesday that the company is exploring new AI deals, which could further enhance its revenue stream.

Following the earnings report, several major financial institutions, including Deutsche Bank, Bank of America, JPMorgan, and Jefferies, raised their price targets for Reddit's stock, with some setting it as high as $120. Jefferies analysts highlighted Reddit's impressive acceleration in advertising revenue growth, signaling significant monetization opportunities even if the pace of user growth slows down.

In related industry news, Snap, another social media platform, reported better-than-expected earnings, which led to a 15% surge in its stock price. CEO Evan Spiegel noted that the number of direct advertisers on Snap more than doubled in the third quarter compared to the previous year, with the company reporting adjusted EPS of $0.08 against an anticipated $0.05 and quarterly revenue of $1.37 billion, slightly above the forecasted $1.36 billion.